Before money we bartered for goods and services. For example if I wanted some ham you had and you wanted potatoes in exchange for giving me the ham I would have to find someone who had potatoes see what they want give it to them get the potatoes and hope you still had the ham and still wanted the potatoes.
As you can see this is extremely tedious and caused a lot of unnecessary struggle. Money was invented to facilitate trade so to speak so you could use the money to exchange for whatever you needed because people accepted it for their service and they could get want they needed.
Money currency refers to a specific countries medium of exchange they use to exchange for goods and services. Exchange and currency go hand in hand because certain people will not take the currency that you hold so you must change it for the accepted currency. The currency exchange process is based on the exchange rates set by the IMF and World Bank. Rate exchange is very volatile and changes are based on the demands by the buyers and sellers in the market The exchange rate decides what one currency is worth compared to another. Conversion rate is the converting of one unit of measure to another. A great example for us would be the conversion from dollars to euros.
Currency exchange is very common when you go vacation especially when the local currency is different from your home currency. If you are traveling you might need a converter. Many apps hold the power do this for you. Some brokers and currency exchange businesses make a profit from the rate of exchange by assigning what is called a spread which is just the difference between the buy and sell price. Exchange rate conversion is finding how much purchasing power you gain or lose by exchanging currencies. Currency conversion is used to convert the purchasing power of one countries currency to another.
Currency exchange is very necessary to learn if you are involved in bartering and import and export businesses.
The Us dollar is the world’s reserve currency and holds precedence over all other currencies, however, we all know the dollar has lost a lot of value and as of August 15, 1971 we are officially off the gold standard meaning that nothing backs the dollars in our pockets. Because of these facts it is important to get educated on how you can make currency exchange a profitable investment for you and your family in these times.